Can Philly Support a World Class Start-Up Community?

What Silicon Valley Had and We Did, Too

The “burgeoning” tech scene in Philadelphia is following the same historical footsteps of California’s Silicon Valley. Technology isn’t new here, and it wasn’t something that simply dropped down on Palo Alto, California one Monday morning in 1977.

California’s San Francisco valley area grew quickly. Palo Alto, the suburb with 7000 businesses that hire 98,000 people, was only incorporated in 1894*. Industry around electricity, gas, radio and television grew in the next century. Stanford University grew along with Palo Alto, providing educated workers and research facilities to the nascent industries.

Philadelphia goes much farther back, of course. This can be a good thing or a bad thing, which we’ll get to in a minute. But let’s remember that we, too, have a long history of industry and research in many areas, including radio and computers. ENIAC, the world’s first electronic general purpose computer, was invented at the University of Pennsylvania in 1946. But going back further, you can see Philadelphia was a pioneer industrial city, in health care and trading routes, then later in textiles, railroads, naval engineering and radio manufacturing. We have plenty of research facilities to back up the industries here. Industry and scholarship grew hand-in-hand in Palo Alto, and Philadelphia has always had a strong presence in both areas.

Here’s what one paper from MIT, quoting a Stanford University scholar, said about the early elements Silicon Valley needed to continue to its current success as an electronics and software hub:

List of companies in the city of Philadelphia

“A leading role for local venture capital,

…a product mix with a focus on electronic components, production equipment, advanced communications, instrumentation, and military electronics

…[and] a tolerance for spin-offs”

We may have missed the early train to the consumer technology boom, but we in the Philadelphia area definitely can show up to this meeting. We have superstar-level venture capitalists (I swear, every event I attend in the city has a “6 Degrees from Josh Kopelman” conversation going on by the bar). We have Comcast, Boeing, Lockheed Martin and lots of incubator support for startups. We tolerate “weird spinoffs,” especially in the arts (Fringe Fest, Mural Arts Program).

What Silicon Valley Had, and We Didn’t:

Our long-standing tradition of bad politics and broken status quo holds us back. The MIT article states that the Silicon Valley also had:

“…a keen awareness of the region as existing largely outside the purview of the large, ponderous, bureaucratic electronics firms and financial institutions of the East Coast;

…a close relationship between local industry and the major research universities of the area;

an unusually high level of inter-firm cooperation”

More companies in Philadelphia

Other local experts can pipe up here, but I’m thinking perhaps our nubile tech companies cannot wrench themselves free of the phenomenon of “East Coast” banking (whatever that is) or the ubiquity of “Philadelphia Lawyers.” (I don’t know what “inter-firm cooperation” is. I grew up in the Commonwealth, I went to college here, I’ve lived in Philly since 1993; I’ve never even heard the term.) This tethering to the “same old, same old” may hold our most creative talent down.

So perhaps those are the areas we can work on, to open up some of the doors that the Silicon Valley had opened for it early on. We can always improve upon the relationship between local industry and the universities. Sure, there are programs, outreach and support, but judging by the laments of “brain drain” by the city government, Temple, Drexel and Penn surely aren’t encouraging their students to take jobs at a Philly start-up, or heck, in one of the many Fortune 500 industries we have in the city and surrounding areas.

Philly always seems to be in an eternal identity crisis. We love kvetching about what we are and what we aren’t, as a city, as a people. Despite all the noise and hands we throw up in frustration, the start-up industry is taking hold here, no matter what. We should embrace it and nurture it.

Let’s Discuss

What are some areas of concern for you? What do you see as the most helpful move we could make to get start-up entrepreneurs to come and stay in Philadelphia?